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Revenue Department of the Finance Ministry of India

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This department of the finance ministry administers revenue or income matters which largely pertain to direct and indirect taxes. The two boards, namely, Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) are the executive agencies through which this income is assessed and realized.

The department implements the provisions of four basic acts which are:

(1) Income Tax Act, 1961

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(2) Wealth Tax Act, 1957

(3) Estate Duty Act, 1958

(4) Gift Tax Act, 1958

In addition, Gold Control Act, 1963 and administrative affairs of life insurance also fall in its purview. The department has an objective of building a bridge between the tax payer and tax collector. It also handles the problem of tax evasion and tax arrears. It has a preventive role also in controlling cultivation and export of opium and narcotic drugs.

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Enforcement of the Customs Tariff Act, 1975 is also its responsibility. The scope of its activities expands manifold when it undertakes the administration of Sales Tax Laws Validation Act (1956) and the Central Sales Laws Validation Act (1956) and the Central Sales Tax Act (1956). Levy of tax in inter-state trade and commerce and replacement of sales tax by additional excise duty are the areas which the department manages through adequate legislation especially in the union territories.

As a punitive agency, it is vested with the powers of controlling illegal economic activities. The Foreign Exchange Regulation Act, 1973 offers it wide powers of intransigence, investigation adjudication and prosecution in preventing smuggling activities. Corporate tax, capital gains tax, profit tax, estate duty, expenditure tax, gift tax enable the department to have its control over the entire economy.

Distribution of revenue stamps, duties on promissory notes, transfer of share debenture, proxies and receipts etc. make the job of the department technical. The Central Economic Intelligence Bureau (CEIB) of the department has wide powers in this regard since 1985. This function of intelligence, investigation and enforcement of the bureau has streamlined the activities of the department against economic offences and corruption in private and public sector of economy.

The administrative organisation of revenue department can be diagrammed as under:

The department is manned by 1 secretary, 17 deputy secretaries, 2 OSDs, 2 directors, 31 under secretaries, 51 section officers and 4 apprentices. All this explains the importance of the department which concentrates on the revenue part of financial administration.

Central Direct Taxation Board:

The CDTB was established in the year 1964 under Revenue Board Act, 1963. Assessment and realisation of entire tax income is the board’s responsibility. The board has a chairman and 6 members. Eight directorates work under the control of the board.

The chart below explains the CDTB organisation:

Directorate of Income Tax (Methods):

It is headed by a chief commissioner. He is assisted by two senior officials working as commissioner (administration) and commissioner (appeals). The number of deputy commissioners varies from five to ten depending on their workload. The assistant commissioners and ITO are spread all over the country.

The CBDT has five regional offices headed by:

(1) Director General Income Tax (Administration), Delhi.

(2) Director General Income Tax (Training), Nagpur.

(3) Director General Income Tax (Concessions), Kolkata.

Central Board of Excises and Custom:

The CBEC assesses and realizes indirect taxes. The excise and customs inspectors of the board control illegal activities and tax evasion. The board advises the finance ministry about proper realizations of customs and excise duties.

The administrative organisation of the CBEC can be depicted as under:

The directorates of customs and excise are spread in different states. The board has three members who look after administration and hear appeals. The board has seven directorates and two offices of director general and has one academy for field operations.

Gold Control Administration:

This Act is enforced by the field directorates of the department. The department registers gold merchants and issues licences. The head office and one regional office of GCA are located at Delhi and Mumbai respectively.

Economic Intelligence Bureau:

It was established in 1985. Its main function is to have an eye on economic offences and collect intel­ligence about black money, smuggling and activities of mafia underworld.

Internal Study Unit:

Established in 1985, the unit works to enhance efficiency in revenue collection. It suggests simplifi­cation of rules and decentralisation of operations to yield results. It does action research and experiences are pooled together to monitor reforms.

Sales Tax Division:

In 1956, the administration of sales tax was handed over to the states. They keep the income but appeals against sales tax assessment, evasion, etc., lie with the revenue department.

Attached Property Appeal Tribunal:

The Act was passed in 1976. The Delhi office has regional offices at Chennai, Mumbai, Kolkata and Guwahati. The tribunal hears appeals and decides cores launched by field officers.